Wall Street Journal: Boris Johnson’s Win Sparks London Property Dealmaking
According to The Wall Street Journal,
Commercial property investors celebrated the victory of Prime Minister Boris Johnson’s Conservative Party by going on a London buying spree.
Investors purchased or agreed to purchase more than £1 billion ($1.31 billion) in office buildings since the Dec. 12 election, according to brokers.
“We’ve had a real flurry of deals,” said Peter Papadakos, an analyst with Green Street Advisors, noting that there were only £9 billion in London office deals in all of 2019 leading up to the election.
The defeat of Jeremy Corbyn’s Labour Party, which vowed to upend many of Mr. Johnson’s business-friendly policies, also flung open doors to new deal making. A Corbyn victory, Mr. Papadakos said, would have raised fears that “London may have lost its appeal” as a financial capital.
Deal volume was slow for most of 2019 partly because investors were worried about Mr. Corbyn heading a new government. In a December report, CBRE Research projected that investment volumes for all the U.K. would be about £45 billion in 2019, down from £65 billion in 2018.
Another worry is that new supply could overload the office market. A number of developers who have delayed projects since the 2016 referendum could move ahead now that much of the uncertainty is lifting.
“Overbuilding is what always spoils the party,” Mr. Papadakos said.
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